Interest rate swap contract: It is an agreement between the two parties who are in contract, where one party chooses to pay a variable rate or a fixed rate agreed in advance for a predetermined period of time. Vice-verse, same is applicable for the other party in the contract.
Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.
An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.
(a) To determine: To determine the amount of interest expense and prepare payment entries.
Given information: All the information related to S Company is provided in the question document.
(b) To determine: To determine and record the swap settlement receipt.
Given information: All the information related to S Company is provided in the question document.
(c) To journalize: To journalize the change in the fair value.
Given information: All the information related to S Company is provided in the question document.
(d) To journalize: To journalize the change in the fair value of the debt.
Given information: All the information related to S Company is provided in the question document.
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